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Child Maintenance and Enforcement Commission Client Funds Account 2011-12

Amyas Morse, the Comptroller and Auditor General, has again been unable to give a full sign off to the Client Funds Account of the Child Maintenance and Enforcement Commission.

The account properly presents the amounts of child maintenance received from non-resident parents and payments to parents ‘with care’ in 2011-12. But the C&AG has qualified his opinion on the regularity of receipts and payments because of the level of error in maintenance assessments. He has also given an adverse opinion on the truth and fairness of the outstanding maintenance arrears.

In 2011-12, the Commission received £807.8 million in respect of child maintenance from non-resident parents. As a result of errors in the calculations of maintenance assessments, the NAO has estimated that a proportion of non-resident parents have made overpayments amounting to £8.8 million, while others have made underpayments totaling £13.3 million.

There is currently a reported cumulative total of £3.798 billion in outstanding arrears from non-resident parents dating back to establishment of the Child Support Agency (responsibility for which was taken over by CMEC) in 1993. Current legislation does not allow for the writing-off of outstanding arrears. These figures do not give a true and fair view because of the level of error in the underlying case data. The best available estimates of the cumulative errors indicate that the reported arrears at 31 March 2012 contained overstatements of £210 million and understatements of £319 million.

Since the inception of the statutory child maintenance schemes, there have been significant problems with the main IT systems supporting the schemes. Among other problems, the IT systems do not have the functionality to report fully arrears for the account. In order to address this, the Commission developed a separate process to scan the underlying systems and produce reports.

The Commission has made efforts to clean up the data which have resulted in the reporting of a more robust arrears position than that reported in the past. However, owing to the scale and age of the issues which have accumulated, there remain significant and unresolved inaccuracies in the reported arrears balance. The Commission was abolished on 31 July 2012, and so these actions will be taken forward by the Department for Work and Pensions.

PN: 72/12